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The Kentucky General Assembly voted last Tuesday to override Gov. Andy Beshear’s veto of House Bill 904, which enacted major changes to how sports betting operates in the Bluegrass State.
The legislation introduces several shifts to sports wagering laws, including raising the legal gambling age, tightening regulations on prediction markets, and restricting in-state college “prop” bets. With the veto overturned, the changes are set to go into effect in mid-July.
Why Gov. Beshear vetoed the HB 904 emergency clause
Beshear’s decision to veto HB 904 was not targeted at the core betting changes but was instead triggered by an emergency clause. This component of the bill allows the Kentucky Horse Racing and Gaming Corp. and the Kentucky Lottery Corp.—two executive branch agencies—to file ordinary and emergency regulations without the governor’s review or approval.
“Under the Kentucky Constitution, the governor is the chief magistrate of the executive branch and has a duty to ensure all laws are faithfully executed, including by agencies carrying out the law through regulation,” Beshear said in a Legal Sports Report news statement.
The governor argued that the bill would prevent him from carrying out constitutional duties. “Authorizing an agency to file an emergency regulation in this manner would… allow boards and agencies to impose rules on Kentuckians without executive oversight, including boards whose decisions impact public safety,” the statement continued.
New Kentucky rules for prop bets and fantasy sports
HB 904 implements several major changes to Kentucky law:
- Raising the legal betting age from 18 to 21.
- Banning prop bets on in-state collegiate athletes.
- Authorizing fixed-odds wagering for horse racing.
The bill also develops new regulations for fantasy sports. Notably, “against-the-house” contests will be eliminated, requiring at least two participants in any contest. These games will also be subject to a 12.5% tax.
Additionally, the bill imposes strict restrictions on prediction markets. While the original wording would have barred operators from holding a Kentucky license if they operated prediction platforms anywhere in the US, the final version was narrowed.
Following a warning from operators like DraftKings and FanDuel that the state could lose $40 million in annual tax revenue, legislators changed the wording to restrict only those operating prediction markets within Kentucky.
How Kentucky lawmakers overrode the governor’s veto
Kentucky maintains a low bar for overriding a gubernatorial veto, requiring only a simple majority in both chambers.
“Virtually any bill that passed, we can override the veto on and almost always do, unless there was a technical error,” said Rep. John Hodgson, R-Fisherville.
The override was widely expected. The Senate and House originally passed HB 904 by 24-13 and 64-19 votes, respectively; the final override votes last week saw similar margins.
